Is Airbnb Smart Pricing the best dynamic pricing tool for your vacation rental business? 

Airbnb smart pricing vs PriceLabs Dynamic pricing


  • Dynamic pricing is a strategy used in the vacation rental industry to adjust rental rates based on seasonal demand, local events, and booking lead time. 
  • Airbnb Smart Pricing feature uses an algorithm that considers various factors like seasonal demand, local events, and other market trends to generate an optimal price for your listing
  • While Airbnb smart pricing helps Airbnb hosts adopt a dynamic pricing strategy, there may be better fits for some. It is because of its need for more customizability, control over pricing, inaccurate pricing, and availability on just Airbnb.
  • PriceLabs, on the other hand, gives hosts greater customization and control over their pricing, considers multiple factors like local events, seasonality, day of the week, etc., while pricing their rental, and supports numerous listing platforms.

What is Dynamic Pricing, and why do you need it?

Dynamic pricing is a strategy used in the vacation rental industry to adjust rental rates based on seasonal demand, local events, and booking lead time. This approach allows property owners to maximize revenue by charging optimally during peak periods while reducing prices during slower periods to attract more bookings. Additionally, it enables property owners and managers to take advantage of last-minute bookings by offering discounts to fill vacant rental periods.

dynamic pricing for vacation rentals
Dynamic pricing

Benefits of dynamic pricing

There are several benefits of dynamic pricing for vacation rentals, including (but not limited to):

  • Maximizing revenue: Property owners can maximize their revenue potential by adjusting rental rates in real time based on supply and demand. This is particularly useful during peak season or special events when demand for vacation rentals is high. Using this strategy, you can raise the prices for the property when guests are willing to pay increased nightly rates. It will help you make more money with the same rental than you usually earn.
  • Encouraging occupancy: Dynamic pricing helps to encourage occupancy during the off-season or slower booking periods. You can fill your units and keep occupancy rates high by offering discounted prices.
  • Competitive advantage: You could have a competitive advantage with dynamic pricing as you adjust your rates sooner than your competitors, as it is beneficial in crowded rental markets where properties may be similar w.r.t amenities and location.
  • Personalization: The practice of dynamic pricing allows property owners to personalize their pricing strategy based on specific factors such as length of stay, booking date, or guest profile. It is helpful to attract certain types of guests, like mid-term renters or business travelers, or incentivize more extended stays.
  • Flexibility: Dynamic pricing allows property owners to adapt to changing market conditions and adjust their pricing strategy accordingly. This can help them stay competitive and make the most of opportunities.

Dynamic pricing is an effective tool for vacation rental property owners to increase revenue and occupancy rates while providing guests with competitive pricing.

What is Airbnb Smart Pricing, and how does it work?

Airbnb Smart Pricing is a dynamic pricing tool that automatically adjusts the nightly rates of Airbnb listings based on demand, seasonality, and other market trends. The algorithm considers various data points, including local events, occupancy rates, and competitor pricing, to help hosts optimize their pricing strategy.

airbnb smart pricing
Airbnb Smart Pricing, Source

The following variables influence the recommended price:

  • Amenities: The more amenities you offer, the higher the platform will list your property. This also impacts how Airbnb ranks your property within search results.
  • Local demand: If demand is high in your property’s area, Airbnb will raise your listing price. For example, during the busy season in a seasonal tourist area, the nightly charges of listings will increase.
  • Views and ratings: The recommended price is calculated based on the number of views your listing receives and the quality of reviews from previous guests. The algorithm tries to capture users’ appeal for certain types of properties.
  • Property type: The tool considers the type of rental you offer, such as whether it has an ensuite bathroom, balcony, or great views.
  • Availability: The more calendar availability your listing has, the higher your recommended price point will be. This translates to a better guest experience, which warrants a higher price.
  • Similar listings: Airbnb considers searches for properties like yours when calculating your listing price. Your suggested rate will be higher if your listing falls under a popular search category.

Is Airbnb Smart pricing the best fit for your vacation rental business? 

While Airbnb Smart Pricing can be a useful dynamic pricing tool for some Airbnb hosts, is it the best option for everyone? You can decide for yourself:  

Benefits of Airbnb Smart Pricing: 

  • You can set a minimum and maximum price for your Airbnb listing, so the algorithm will always stay within that range.
  • Airbnb’s Smart Pricing uses real-time metrics to generate price tips for your listing based on trends and patterns in your specific market. Your price will change based on those specific patterns, which means you can benefit from sudden market surges, such as when a popular band announces a concert in your area.
  • Adjusting your price in real-time gives you a competitive edge over local competitors who don’t change their prices.
  • If your nightly charge is too high, Airbnb will automatically lower it to keep your vacation rental rate under a certain threshold.

Airbnb Smart Pricing may not be the best dynamic pricing tool for you:

  • Airbnb Smart Pricing is a one-size-fits-all pricing tool. It may not always reflect the unique needs and circumstances of individual hosts or listings. Hosts may have specific pricing goals or preferences that Airbnb Smart Pricing cannot accommodate.
  • It is an automated tool, and hosts may prefer to control their pricing strategy. Hosts may choose to set their pricing manually based on their unique knowledge of the local market, seasonality, and other factors.
  • While Airbnb Smart Pricing considers various factors to determine optimal pricing, it may not always accurately reflect local market conditions or demand. As a result, hosts may end up pricing their listings too low or too high. Therefore, leading to missed revenue opportunities or lower occupancy rates. Also, it becomes difficult for guests to differentiate between two hosts and the amenities they offer if they are priced the same
User complaints about Airbnb Smart pricing
User complaints about Airbnb Smart pricing
  • The tool is designed to respond to changes in competitor pricing. However, this may only sometimes be the most critical factor for hosts. Hosts may have unique features or amenities that set their listings apart from competitors. These may not be reflected in Airbnb Smart Pricing’s algorithm. The lower rates Airbnb charges to stay ahead of its competitors can result in underperforming for the hosts. 
  • Most hosts list their vacation rentals on multiple platforms like Vrbo and Ideally, they want their listing prices to match across platforms, which is impossible with Airbnb smart pricing

While Airbnb Smart Pricing can be a valuable tool for some hosts, there may be better fits for some hosts. Therefore, hosts should consider their specific goals and circumstances when choosing between Airbnb Smart Pricing or other dynamic pricing tools.

Why choose PriceLabs over Airbnb Smart Pricing? 

There are several reasons why PriceLabs may be a better choice for hosts than Airbnb Smart Pricing:

  • PriceLabs offers high customizability, allowing hosts to set pricing rules and strategies. Hosts can adjust pricing based on various factors, including occupancy levels, seasonality, and local events. This level of flexibility allows hosts to tailor their pricing strategy to their unique circumstances and goals.
  • It puts hosts in control of their pricing strategy. Hosts can adjust prices manually, set minimum and maximum prices, and adjust prices in response to changes in market conditions. This level of control can help hosts optimize revenue and occupancy rates.
  • PriceLabs uses advanced algorithms to analyze market trends and predict demand. This allows hosts to set prices that accurately reflect market conditions. It can help hosts avoid pricing their listings too high or too low, leading to better revenue and occupancy rates.
  • Unlike Airbnb Smart Pricing, which wants to benefit both the host and the guest, PriceLabs primarily focuses on maximizing vacation rental host revenue.
  • The dynamic pricing platform supports a range of vacation rental platforms, not just Airbnb. Hosts can use PriceLabs to optimize pricing across multiple platforms, helping them reach a wider audience and maximize bookings.
Airbnb Smart Pricing vs PriceLabs Dynamic Pricing

PriceLabs offers a more flexible, customizable, and accurate dynamic pricing tool than Airbnb Smart Pricing. By putting hosts in control of their pricing strategy, PriceLabs can help hosts optimize revenue and occupancy rates. It is regardless of the platform they use.

PriceLabs gives greater control over your revenue management strategy

PriceLabs assists you in having a more revenue management strategy with greater control over your dynamic pricing. Here’s how:

PriceLabs Neighborhood Data Tool for Dynamic Pricing
  • PriceLabs have a lot of capabilities for vacation rental managers to set the minimum length of stay restrictions that will automatically adjust for weekends and weeknights, along with how close in or far out the date is. You can set up rules for applying default minimum night requirements and special minimum night rules for last-minute, orphan-day / gap-day, and far-out bookings. The MinStay Recommendation Engine helps you maximize revenue by suggesting the best minimum stay restrictions for your properties.
PriceLabs Minimum Length of Stay Customizations
  • You can apply various pricing customizations like last-minute, orphan day, and day-of-week adjustments. These are in addition to minimum stay customization using PriceLabs. These customizations give you complete control over your pricing strategy. 
PriceLabs customizations offer more control over dynamic pricing
  • You can also set Date Specific Overrides for specific dates. These come in handy when you want more control over your pricing. You can enable this feature when your goal is to allow different pricing for specific dates without altering your pricing for the entire calendar. 
  • Aside from account customizations, you can also create groups to manage multiple listings together with group-level customizations. These groups can be based on city names, listing types, neighborhoods, or owner/legal restrictions. 
  • The Multi Calendar allows you to view and set pricing customizations and overrides, toggle sync on or off, perform a manual sync or save and refresh your listings. You can perform most actions using this page. These include reviewing prices and managing the listings page for multiple listings at once from one place.
PriceLabs Multi-Calendar for viewing and customizing multiple listings settings from one tab
PriceLabs Multi-Calendar for viewing and customizing multiple listings settings from one tab
  • PriceLabs Market Dashboard gives you insights into market trends, including lead times, desired amenities, and what fees and discounts are in place for listings in your area. You can also use the pacing chart in the market dashboard to stay ahead of the competition. 
PriceLabs Dynamic Pricing
  • Portfolio Analytics tool is a free tool that gives you an excellent overview of metrics and trends for your properties. You can view these for individual listings or your entire portfolio at once.
PriceLabs Portfolio Analytics

Why do leading property managers around the world trust PriceLabs?

PriceLabs is an established vacation rental dynamic pricing software provider with nine years of experience. The platform prices over 200,000 listings daily. The company has a reputation for serving well-known clients.

  • Coverage: The company provides data for every local market and integrates with 90+ PMSs. Additionally, it has direct connections with Airbnb and Vrbo.
  • Proprietary Technology and Data: PriceLabs has its own set of data and a team of data scientists.
  • Value for Money Business Model: The platform offers constant innovations, including the world’s first minimum stay recommendation A.I. tool. It has a flat-fee software cost that does not rise proportionally with the client’s success.
  • User-First Culture: PriceLabs prioritizes its users by actively listening to client needs and having a fast go-to-market approach. Additionally, it has account managers with experience in property management and a long history of understanding property managers’ imperatives. These include balancing pricing automation algorithm improvements with easy-to-set-up overrides. It allows clients to price their way and helps revenue managers save time with grouping and bulk-editing tools.

Frequently Asked Questions

What is the best pricing strategy for Airbnb?

The best pricing strategy for Airbnb depends on factors such as location, seasonality, competition, and demand. Dynamic pricing, long-term discounts, last-minute deals, weekday vs. weekend pricing, and seasonal pricing are some strategies to consider. Experimentation and monitoring results are vital in finding the most effective pricing strategy.

What pricing does Airbnb use?

Airbnb’s reservation total consists of the host’s nightly rate and either Host or Airbnb-determined fees/costs.

What is a smart pricing strategy?

Smart pricing is a dynamic pricing strategy Airbnb uses to adjust listing prices based on factors such as demand, seasonality, local events, and other market trends. Hosts can opt to use smart pricing, which uses an algorithm to adjust their listing price to optimize bookings and revenue automatically. Smart pricing is designed to help hosts remain competitive in their market by adjusting prices in real-time to reflect changes in supply and demand.

How do I maximize my Airbnb algorithm?

To maximize your Airbnb algorithm, you must keep your calendar up-to-date, respond promptly to inquiries and booking requests, maintain a high rating, use high-quality photos, offer competitive pricing, optimize your listing with accurate titles and descriptions, and increase bookings. By doing so, you can improve your visibility in search results, attract more bookings, and potentially achieve Superhost status, further boosting your visibility and bookings.

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